Details for: PGE's Reply to Protests of AL 5308-E.pdf

Click on the image for full size preview

Document data

Erik Jacobson

Regulatory Relations

Pacific Gas and Electric Company
77 Beale St., Mail Code B13U
P.O. Box 770000
San Francisco, CA 94177
Fax: 415-973-3582

July 10, 2018

California Public Utilities Commission
Energy Division Tariff Unit
505 Van Ness Avenue, 4th Floor
San Francisco, CA 94102


Pacific Gas and Electric Company’s Reply to the Protests from (1)
Sierra Club, (2) ORA and (3) TURN to Advice 5308-E - Modifications
to Rate Schedule NEMFC (Net Energy Metering for Fuel Cells) to
Include an Integrated Energy Storage Device Incorporating A NonImport Relay Equivalent

Dear Energy Division Tariff Unit:
Pacific Gas and Electric Company (PG&E) hereby replies to the July 2, 2018 protests to
PG&E’s Advice Letter (AL) 5308-E from: (1) Sierra Club, (2) Office of Ratepayer
Advocates (ORA) and (3) The Utility Reform Network (TURN) (collectively referred to as
the Parties).
I. Background
On June 12, 2018, PG&E filed Advice Letter (AL) 5308-E requesting to modify PG&E’s
Electric Rate Schedule NEMFC (Net Energy Metering for Fuel Cells) to allow the
generating facility to include an energy storage device (i.e. batteries) using a non-import
relay equivalent. The non-import relay equivalent would make it impossible for the
storage to charge from the grid, thereby making all exports from the energy storage
device solely from the fuel cell. This advice letter establishes the criteria through which
Eligible Fuel Cell generators under NEMFC can incorporate storage.
In their protests, the Parties raised similar points that centered on three key areas. First,
TURN, the Sierra Club and ORA all point out that AL 5308-E does not restrict the fuel
cell paired with storage to running off renewable fuel, and the Parties believe that this is


- Page 1 -

PG&E Reply to Protests of Advice Letter 5308-E -2- July 10, 2018 required. They cite to Decision (D.) 14-05-033 1, Public Utilities Code (PUC) Section 2827.1, PUC Section 2827(b)(11) and Public Resources Code section 25741(a)(1) as evidence of this requirement. Second, building further on the first point, ORA points out that PG&E’s interconnection forms suggest that storage must be charged renewably while PG&E’s current NEMFC tariff does not require this. Specifically, ORA writes, “Appendix H of the NEMFC Interconnection Agreement, “Generating Facility Interconnection Agreement,” included in PG&E’s advice letter, describes requirements for eligible renewable electrical generation facilities pursuant to Section 2827.1 of the Public Resources Code and serves as an affidavit that the generation facility qualifies as a Renewable Electrical Generation Facility….Special Conditions section 9 of Electric Schedule NEMFC in AL 5308-E does not limit eligibility for NEMFC rates to fuel cells that use renewable fuel.” 2 Third, Parties raise issues about how the Air Resource Board’s (ARB’s) standards should be administered, and/or how the NEMFC tariff should be administered both before and after the adoption of the proposed standards by the California Public Utilities Commission (CPUC or Commission). The Sierra Club believes the NEMFC program should be suspended until ARB GHG standards are issued, writing that, “Given the significant potential for natural gas-powered fuel cells to fail to meet the GHG eligibility threshold, the Commission should end interconnections of natural gas-powered fuel cells under the NEMFC tariff until a threshold and procedures for its implementation are finalized.” 3 Sierra Club also notes there is no mechanism to reimburse ratepayers if ultimately ARB’s GHG Standards are not met once the standards are in place. ORA suggests the CPUC establish programs to monitor and verify compliance with the ARB standards and the Sierra Club requests independent testing be required to ensure the ARB standards are met. ORA raises questions about whether current fuel cells can even meet the proposed ARB standards and questions why customers should even be allowed to interconnect now that a proposed standard has been issued by ARB. PG&E responds to these major issues below. Other points were raised by parties, including procedural issues, emissions issues and dispatchability, which PG&E also addresses below. II. Response to Protests PG&E appreciates the opportunity to respond to the points raised by the protesting Parties. The issues raised in Party protests generally fall into three categories: (1) issues that can be clarified; (2) issues that can be corrected; and (3) issues that are 1 Decision 14-05-033 May 15, 2014, Issued May 23, 2014 Decision Regarding Net Energy Metering Interconnection Eligibility For Storage Devices Paired With Net Energy Metering Generation Facilities 2 ORA Protest, p. 4. 3 Sierra Club Protest, p. 3.
- Page 2 -

PG&E Reply to Protests of Advice Letter 5308-E -3- July 10, 2018 outside the scope of this filing. PG&E addresses the three major issues, followed by brief discussions of other issues raised by one or more of the Parties. A. NEMFC is not required to satisfy D.14-05-033 PG&E acknowledges that the references to D.14-05-033 included in AL 5308-E could have been clearer. Although D.14-05-033 is not directly applicable here, PG&E included that language, and references to AL 5245-E 4, to provide more information about a similar methodology. When applied to fuel cell installations, the non-import relay equivalent describes what steps a fuel cell manufacturer would be required to undertake to establish that the storage unit could only charge from a nonrenewably fueled fuel cell. In addition, PG&E’s intent in including references to AL 5245-E was to indicate that this approach of ensuring that storage, meeting the proposed criteria, could not charge from the grid had already been adopted by the CPUC in other net energy metering contexts. The NEMFC tariff was established to implement PUC Section 2827.10, not PUC Section 2827 (or the subsequent 2827.1), which relates to schedules such as NEM2V discussed in AL 5245-E. Exports to the grid by fuel cells under NEMFC are credited at the generation component of the energy charge, not the full retail rate. Most importantly, fuel cells interconnecting under NEMFC are not required to be renewably fueled. PG&E notes that if this were a requirement for fuel cell installations, it is more likely that they would interconnect under the current NEM Successor Tariff to receive full retail credit for exports rather than just the generation credit. To confirm, references to D.14-05-033 were intended to show how this proposal for fuel cells with storage would fit in the category of generation paired with storage that could not charge from the grid. The point was, if the storage could only charge from the fuel cell, then all exports to the grid would only be fuel cell-generated electricity and would therefore be eligible to receive generation credits. B. PG&E appreciates the identification of unclear language in Appendix H ORA points out that Appendix H, attached to the Advice Letter, which is the Interconnection Agreement signed by NEMFC customers, includes “renewable” in the title and does not include a reference to PUC Section 2827.10. ORA concludes that there is a requirement that NEMFC customers be renewably fueled. PG&E appreciates this notification that the language in Appendix H is less than clear when confirming that facilities interconnecting under NEMFC are not required to be 4 AL 5245-E - Revisions to Schedules NEMV, NEM2V, NEMVMASH and NEM2VMSH for Customers with Virtual Net Energy Metering Generation Paired with a Storage System in Compliance with Decision 17-12-005
- Page 3 -

PG&E Reply to Protests of Advice Letter 5308-E -4- July 10, 2018 renewably fueled. PG&E assures the CPUC that appropriate procedures are followed for NEMFC customers -- specifically, customers taking service under NEMFC only use the interconnection agreement that includes Appendix H if they are using NEMMT. PG&E will file an Advice Letter amending Appendix H to make the compliance requirements for NEMFC customers clear, in those cases when they will be using the NEMMT Interconnection Agreement. C. This Advice Letter is not the forum to address concerns regarding GHG emissions Parties ask the CPUC to suspend availability of the NEMFC tariff until the GHG emissions standards required by Assembly Bill (AB) 1637 have been determined by the ARB and implemented by the CPUC. PG&E acknowledges that the compliance requirements may be difficult to meet and that implementation of AB 1637 standards has not occurred on the Legislature’s anticipated timeline. 5 However, since AL 5021-E 6 was filed as a Tier 1 advice letter in response to ED guidance effective February 13, 2017, PG&E has an approved tariff that addresses the expected requirements and believes it is in the best interests of our customers to continue to allow interconnection. PG&E has taken steps to ensure that customers taking advantage of NEMFC are aware that the emissions standard will apply to their generator once it is implemented by the CPUC. Inclusion of Appendix J to the Interconnection agreement ensures that customers are aware of any risks. The current NEMFC tariff was approved by the CPUC and will remain available unless and until the CPUC modifies it. The aforementioned comments Parties made on this Advice Letter pertain to the implementation of the AB 1637 GHG emissions requirements. This advice letter pertains to the treatment of storage. As such, this advice letter is not the appropriate forum for Parties to request such modifications. PG&E acknowledges that there are implementation concerns surrounding meeting the emission requirements but suggests that Parties provide input once the CPUC incorporates the standards into the NEMFC tariff. At this time, PG&E requests that the CPUC disregard those comments and approve its Advice Letter. D. A Tier 2 Advice Letter is appropriate for the limited purpose here TURN and Sierra Club suggest that a Tier 2 Advice Letter filing is not appropriate for the proposed change to the NEMFC Tariff. As PG&E has clarified, this Advice Letter is restricted to the addition of a procedure whereby a customer can install a more efficient fuel cell by combining it with a storage device. The proposal is limited, so long as the storage device only charges from the fuel cell, the eligibility for NEMFC would be unaffected. 5 6 AB 1637 directed the ARB to determine an appropriate emissions estimate by March 31, 2017. AL 5021-E - Advice Filing Regarding Implementation of Assembly Bill (AB) 1637 (Low, 2016) and Associated Modifications to Schedule NEMFC
- Page 4 -

PG&E Reply to Protests of Advice Letter 5308-E -5- July 10, 2018 E. The GHG emissions of the fuel cell are not germane Sierra Club suggests that, based on the Itron study, NEMFC customers will increase GHG emissions if they add storage. Whether or not this is true is not the point. Regardless of how the fuel cell is configured (standalone or combined with storage), if it is interconnected under NEMFC, it will be required to meet the GHG emissions standards for NEMFC once they are implemented by the CPUC. F. Dispatchability of fuel cells is not germane Sierra Club asserts that since fuel cells are dispatchable, there is neither a need for storage to be added nor for a modification to the NEMFC tariff to allow this. PG&E disagrees. As stated in the Advice Letter, Bloom relays that they seek approval to combine storage with their fuel cell to make it more efficient, while better meeting customer load needs. Based on Bloom’s assertion, irrespective of whether it is dispatchable, a fuel cell is more efficient if it can run at optimum. Since the dispatchability of a fuel cell is not relevant to whether it is eligible for NEMFC, the addition of storage that can only charge from the fuel cell does not change this. III. Conclusion PG&E appreciates the concerns raised by the Parties, but PG&E believes they are more directed toward both the NEMFC program in general and the delay in implementation of AB 1637. These aspects of NEMFC are not at issue in PG&E’s Advice Letter. Rather the purpose of PG&E’s Advice Letter is very narrow. AL 5308E is limited to seeking approval for a process that permits the addition of storage with NEMFC generators in cases where the storage can only be charged from the fuel cell generator. As such, PG&E respectfully requests the approval of AL 5308-E as submitted. Sincerely, /S/ Erik Jacobson Director, Regulatory Relations cc: Service Lists R.11-09-011, R.12-11-005, R.14-07-002, R.17-07-007
- Page 5 -